Digital Equipment Corporation (DEC)
Digital Equipment Corporation (DEC) was a pioneering company in the computer manufacturing industry, founded in 1957 by Kenneth Olsen and Harlan Anderson. Known for its development of minicomputers and information systems, DEC's first notable product was the PDP-1, which helped establish the standard for early computing. The company gained fame for its PDP series, particularly the successful PDP-8, which introduced the concept of the minicomputer to a broader market. DEC also created the VAX line in 1977, which further solidified its position in the industry throughout the 1980s.
Despite its early successes, DEC faced increasing competition, especially from IBM, and struggled with financial challenges, leading to Olsen's resignation in 1992. Shortly thereafter, the company launched its own website and developed the AltaVista search engine, a significant innovation of the time. In 1998, DEC was acquired by Compaq, which was itself later bought by Hewlett-Packard in 2002. Although DEC no longer operates as an independent entity, its legacy continues through its contributions to computing technology and the impact of its egalitarian corporate culture on the industry.
Digital Equipment Corporation (DEC)
- Company Information
Overview
Digital Equipment Corporation (DEC) was a publicly held company in the computer manufacturing industry that made and sold minicomputers and information systems. From its inception in 1957 to the late 1980s, DEC thrived as a pioneer in the industry. Then, when founder Ken Olsen resigned in 1992, the business lost profits as well as the ability to compete with other companies in the industry. By 1998, DEC was bought by the Compaq Computer Corporation (Compaq), and years later, Compaq was bought by Hewlett-Packard.
Before it was purchased by Compaq in 1998, one of DEC’s biggest rivals was International Business Machines (IBM). Even though DEC created a few products that inspired imitation by other companies, DEC mainly sold central processing units (CPUs) to companies to use in their own machines. Selling base-level products to potential competition allowed DEC to diversify into different areas such as the medical, research, communications, and physics fields.
History
Digital Equipment Corporation (DEC) was cofounded by Kenneth Olsen (1926-2011) and Harlan Anderson (1929-2019) in 1957 after Olsen graduated from the Massachusetts Institute of Technology (MIT). The cofounders also enlisted the financial assistance and venture capitalistic ideals of Harvard University’s Georges F. Doriot. His contribution successfully labeled the company as the first prosperous computer manufacturing business to be backed by venture investment. Shortly after the start of DEC, Anderson left, and Olsen took sole control.
Olsen ran the company out of an old mill factory in Maynard, Massachusetts, and had future expansions built around this location. The first machine DEC produced was the PDP-1 (programmed data processor) in 1960. It was sold with a screen, which was unusual at the time. Spacewar!, the first video game, was created on the PDP-1’s interface.
Due to its initial success, the PDP became the standard for DEC machines in the company’s early years. The PDP had many iterations but not all were successful; however, two of the most important versions were the PDP-5 and PDP-8.
The creation of the PDP-5 in 1963 introduced the company’s representative product: the minicomputer. The PDP-5 was the first minicomputer produced for public purchase—it did everything an early computer could do but on a smaller scale. The PDP-5 directly competed with IBM’s large corporate computers and established the two companies as competitors within the industry. However, despite the PDP-5’s new take on the business computer, it did not sell well. It was not until the introduction of the PDP-8 in 1965 that the minicomputer became a successful business venture.
While the PDP machines were being sold by DEC as single entities, processors and other aspects of DEC’s computers were sold to associated companies for use in their own machines. This practice was a first for the industry and was called original equipment manufacturing (OEM). For example, the CPU of the PDP-8 was used by MIT-based Lincoln Laboratory to create the Laboratory Instrument Computer (LINC), which diversified DEC’s products into the medical field. Because of OEM, DEC did not offer repair services for its products, nor did the company write its own software.
By the 1970s, DEC bought international manufacturing properties as well as some in the United States, mostly in Massachusetts. Throughout the decade, production plants were built in England, Germany, Ireland, Japan, Puerto Rico, and other countries. As the company expanded into international markets, it looked to add another brand of machine to its product list. While still developing PDP units, DEC introduced the Virtual Address Extension (VAX) in 1977 as the VAX-11/780. This machine had double the memory capacity of the PDP-11, introduced in 1970.
The success of the VAX line of machines helped DEC maintain its powerful position in the computer industry through the 1980s. By 1982, the company began producing personal computers (PCs), despite Olsen’s initial resistance. However, DEC’s line of PCs, including the Professional 325 and 350 as well as the Rainbow 100, did not sell. Despite this unsuccessful venture, half of DEC’s multibillion-dollar profits came from international markets by 1989.
Since the introduction of PCs, competition among DEC employees put the company in a compromising financial state, leading to a downturn in the marketing and development of products. Olsen resigned from DEC in 1992 after a series of financial mishaps within the company. Shortly after his departure, DEC became one of the first companies to launch its own websites. It also developed and introduced an acclaimed web search engine called AltaVista.
In 1998, DEC was purchased by Compaq, a leading computer company. Compaq was then purchased by Hewlett-Packard in 2002.
Impact
Even though DEC no longer exists, its products and ideals live on through past employees across different computer manufacturing companies such as Hewlett-Packard and Microsoft. In addition to DEC’s PDP and VAX products, the company’s organizational model was influential. Instead of a direct hierarchy, Olsen and other executives treated all employees as equals. Despite DEC’s short stint in the computer manufacturing industry, its products and treatment of its employees continue to inspire DEC’s alumni and the industry as a whole.
Bibliography
Barron, Brenda. “The Tragic Tale of DEC, the Computing Giant That Died Too Soon.” Digital, 20 Feb. 2023, digital.com/digital-equipment-corporation. Accessed 5 May 2023.
"Digital Equipment Corporation." Lehman Brothers Collection, Harvard University, www.library.hbs.edu/hc/lehman/data-resources/companies-deals/digital-equipment-corporation. Accessed 31 Oct. 2024.
"Digital Equipment Corporation: Nineteen Fifty-Seven to the Present." CHM, 1978, www.computerhistory.org/pdp-1/8a9cb4c9f949fbb3e577016d174499ca. Accessed 31 Oct. 2024.
Earls, Alan R. Digital Equipment Corporation. Arcadia Publishing, 2004.
Jarvenpaa, Sirkka, and Blake Ives. "Digital Equipment Corporation: The Internet Company (A)." University of Southern California, www.columbia.edu/~rk35/commerce/digital.html. Accessed 6 May 2023.
Rifkin, Glenn. "Ken Olsen, Who Built DEC into a Power, Dies at 84." The New York Times, 7 Feb. 2011, www.nytimes.com/2011/02/08/technology/business-computing/08olsen.html. Accessed 8 May 2023.
Schein, Edgar H., et al. DEC Is Dead, Long Live DEC: The Lasting Legacy of Digital Equipment Corporation, Berrett-Koehler Publishers, 2004.
"What Happened to Digital Equipment Corporation?" InspireIP, 4 Feb. 2024, inspireip.com/what-happened-to-digital-equipment-corporation. Accessed 31 Oct. 2024.